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Falcon Tyres Ltd, the flagship company of the diversified P.K. Ruia group, has completed the expansion project at its Mysore plant and will soon start commercial production of niche tyres for four-wheelers, a segment which it was not catering to earlier.
The company, which markets its tyres under the Dunlop brand name, manufactured at Mysore and another plant of Monotona near Mumbai, has been a major player in the two and three wheeler tyres, accounting for about 22 per cent share.
This is a strategic entry as the company has a strong presence in two-three wheelers engaged with all leading original equipment suppliers (OEMs), Mr Sunil Bhansali, Executive Director of Falcon Tyres, told Business Line .
Mr S. Ravi, Director of Ruia Group, said the company invested about Rs 320 crore in the expansion project at Mysore for four-wheeler tyres. Trial runs are over and the commercial production would commence soon.
“The company has established a new production capacity to churn out 9,000 four-wheeler tyres a day (about 2,70,000 a month) and 3.5 million a year. This complements the current capacity of one million two-three wheeler tyres a month. Together, with new manufacturing capacity, we will have production capacity of over 15 million tyres per annum,” Mr Bhansali explained.
“Last fiscal, Falcon Tyres closed with a turnover of about Rs 1,000 crore. The new manufacturing line would add about Rs 600 crore during full year of operation. However, for the current fiscal, we may see an overall growth of over 15 per cent, in spite of tough business conditions,” they said.
The company’s 6 MW co-generation plant that runs on bagasse, meets internal consumption of 3 MW and the rest is sold, Mr Bhansali said.
Referring to input costs, the ED said that the price of rubber has been a cause for worry. It has shot up from Rs 120 a kg a year ago to Rs 240 a kg and now ruling at about Rs 190 per kg.
About 45 per cent of the company tyres made today are supplied to OEMs, 45 per cent goes to replacement segment and the rest exported. Exports would play a bigger role with new capacity in place, Mr Ravi said.
The senior management of Falcon Tyres was in Hyderabad for a dealer meet and launch of a new promotional campaign.
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